Lady Gaga Harvard Case Solution & Analysis

Solution 1

Kayne West’s decision of taking a break from the music industry has led the manager of Lady Gaga, Troy Carter along with his team members into a serious dilemma. He has three possible options with different financial aspects. Option number 1 is recommended because it has some handsome financial returns. Although, it is a fact that these financial aspects may create some hurdle but the manager, Troy Carter was sure about the fan following of Lady Gaga and he stated that audience likes her song and now the time was right for Lady Gaga to appear in front of the massive crowd; therefore, this option should be adopted.

Solution 2

Option 1 Analysis

In Option 1, they can plan 25 concerts in the tour with an average capacity of 16,000-20,000 audience. The ticket price will be around \$100-\$150 per person. area major issue is that the startup cost is already paid by West’s team, which is around \$12 million; this needs to be reimbursed by the team of Gaga.

 Concerts Audiences Ticket cost Revenue 25 \$20,000 \$150 \$75,000,000

This option looks feasible from financial perspective if they go for 25 concerts but this will be a huge financial gamble at this stage. Moreover, they have to reimburse the initial expenditures of around \$12 million as well; which can be covered from the expected revenue of \$75 million.

At this stage, such a high level tour may create some issues because Lady Gaga is in-experienced and handling such a massive tour in a single trip may create some issue or controversy as well. But at this stage, this option is recommended because it can give her a tremendous boost across the globe. Moreover, the team of Gaga is confident about her popularity and it is sure that people actually want to see Lady Gaga on the stage.

Option 2 Analysis

In Option 2, they have a choice of doing concerts at small level and to choose smaller venues. These venues must have a capacity of around 6000-8000 audience. The ticket price will be around \$60-\$100 per person, which makes the manager little worried.

 Concerts Audiences Ticket cost Revenue 25 \$8,000 \$100 \$20,000,000

By going for this option, they are suffering a lot in terms of the financial perspectives. Their total expected revenue will be \$20 million, which is comparatively quite low from option1. Moreover, they need to pay an additional cost of \$2 million, which is ahead of \$4 million that they have already paid. Furthermore, this option is giving them a very low audience exposure that may not suit Lady Gaga. Since, expenses are high and net profit may not reach the possible expectations as in option 1; so this option is not recommended.

Option 3 Analysis

Option 3 presents the idea of cancelling the tour to avoid any further cost. At this stage, Lady Gaga wants market exposure so she must perform in concerts and engage with the audience as much as possible. Since, they have already spent an amount of \$4 million so this amount will be lost in the case of cancelling the tour. This option will not create a financial loss only but it will also hurt the brand image of Lady Gaga at this stage.

Solution 3

Live Nation is the concert promoter for Lady Gaga and its core responsibility is to arrange all the facilities that are required for a concert, which includes the venue booking, arranging hotels, transportation and etc. Since, Option 1 involves 25 concerts with massive public presence, so this will directly benefit the Live Nation and WME because of enormous ticket selling, which will increase their share in terms of money. Option 2 is financially un-feasible for Live Nation and WME because it has very low presence of audience with low ticket cost that is not suitable for these companies.

Solution 4

Lady Gaga was born in New York in 1986, and passed her childhood in Manhattan’s West Side. She has been a music lover since a shw was very young and she started playing the piano at around the age of 4. She has learned many genres in music, which includes the piano singing and classical singing. In 2003, she got addmission in the New York University that enhanced her skills in an optimistic manner. After a year, she deliberately left the school and start focusing on music on a full time basis........................................

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